U.S. Physical Therapy, Inc. Q4 FY2025 earnings call

• 2025 was an excellent year with strong financial results across multiple metrics. • Fourth quarter had strong revenue and visit growth in physical therapy, with average visits per clinic per day at record levels. • Made several acquisitions, including in Pacific Northwest, home care, and injury prevention. • Announced two significant hospital arrangements with long-term impact on patient reach, volume, margins, etc. • 2026 initiatives include rollout of ambient listening documentation support, semi-virtualization of front desk and intake, cash-based program expansion, return to remote therapeutic monitoring, pursuit of large market strategic hospital alliances, and ongoing de novo and acquisition-related development in PT and injury prevention segments.

For the year ending 2025, adjusted EBITDA increased $13.2 million (16.2% improvement over prior year). Revenue increased 16.3%, with physical therapy up 16% and injury prevention up 18%. Gross profit in PT operations increased ~21%, and in injury prevention business up over 20%. Fourth quarter highlights: Physical therapy had strong revenue and visit growth, average visits per clinic per day was a record, gross profit up over 25% vs Q4 2024. Made several acquisitions, announced two significant hospital arrangements. For full year 2025, average visits per clinic per day was 32.2 (record annual volume), total patient visits up 11.2%, net rate per patient visit increased 1% to $105.76, adjusted EBITDA increased 16.1% from $81.8 million to $95 million. IIP income grew double digits, 11.5% in Q4 and 20.2% full year.

• Currently expect adjusted EBITDA for 2026 to be in the range of $102 million to $106 million, including $2.5 million in incremental revenue from Medicare rate increase effective Jan 1, 2026. • Hospital affiliations will begin mid-2026 and phase in over second half, expected to contribute at least $14 million to PT revenue and income and at least $7.3 million to USPH's adjusted EBITDA when fully implemented by year-end 2026.

Q: Just on the strategic alliances, is the move for outsourcing of physical therapy services or general move across medicals to outsource to out-service facilities driving motivation from hospital side? And how is the $14 million number assumed?

A: Motivation is multi-part including broader patient reach for hospitals, efficacy of care accruing to hospital benefit, and cementing musculoskeletal product line. The $14 million number assumes current volumes and there are additional facilities planned in these relationships.

Q: Concern about inflation, wage inflationary pressures and slowdown in PT volumes. Thoughts on 26th volume outlook?

A: Salaries have normal inflationary budget for 2026, no particularly high wage pressure. Volumes picked up in fourth quarter on mature clinics, with initiatives like virtualization at front desk, AI documentation, remote therapeutic monitoring and hospital relationships expected to help balance cost and revenue sides.

Q: In terms of pricing, non-Medicare pricing guesstimate?

A: Expect 1.5% to 2% positive for non-Medicare pricing.

Q: Payer mix and workers' comp comments?

A: Payer mix was commercial just above 48%, Medicare just above 33%, workers' comp 9.7% in fourth quarter 2025, all categories increased double digits from Q4 2024.

Q: Gross margin in injury prevention, year-over-year increase but sequential down. Thoughts?

A: Signed big contracts that required staffing up ahead of revenue generation, and seasonal factor as fourth quarter is usually light in some manufacturing facilities.

Q: 2026 Guide, same-store revenues financial revenues assumption?

A: Expect visits and rates combined to be around 3% increase in same store, with more rate momentum in 2026 due to Medicare rate increase.

Q: Hospital alliances, rate, profit headwind, exclusivity?

A: Rates are hospital outpatient rates. No profit headwind when standing them up. These are exclusive relationships for outpatient business in the relevant markets.

Q: On IIP, new service offering capabilities with recent acquisition?

A: The recent acquisition provides different testing capability, like blood work and related testing for infrastructure projects, broadening service offering.

Q: Preference for M&A between segments, size of opportunities in PT?

A: Injury prevention has better embedded organic growth but fewer deals, PT still has great opportunities. Looking for opportunities like metro and those that can be strengthened with hospital partners, and active in both areas.